SCHINDLER: In perspective, I believe you concluded that Rockefeller was, in fact, wealthier.

"So here’s a man who is operating on two pistons throughout his life: making as much as he can and giving away as much as he can."

CHERNOW: It depends upon how you measure wealth. Rockefeller reached the peak of his net-worth in 1913. He was worth $900 million. That would translate into approximately $13 billion today ... Well south, not only of Bill Gates’ $50 billion plus, but of Warren Buffet’s $30 billion plus. But that’s not the entire story, because in 1913 the federal budget was $750 million, so Rockefeller could have single-handedly paid the Federal budget that year. The accumulated national debt of the United States that year was 1.2 billion dollars, so that Rockefeller could have single-handedly retired three quarters of the national debt.

If you compare Rockefeller’s net-worth to the gross national product it comes out to 2.5 percent vs. a little more than one half of one percent for Bill Gates. So if we ask ourselves the question, ‘which man loomed larger in the economy of his day?’ Rockefeller, by that standard was far wealthier; on the other hand if we simply take the $900 million and convert it into contemporary dollars, by that measure, not only Bill Gates, but Warren Buffet seem infinitely wealthier than Rockefeller. So there’s no satisfactory way of measuring this.

SCHINDLER: You mentioned that his worth peaked in 1913 at $900 million, as I recall the number from your book, when he died his estate was down to $26 million, pretty much as the result of philanthropy.
CHERNOW: In the nineteen-teens, when he was in his 70s, he began to divest himself of his wealth. He had already given away about $500 million to his philanthropies -- that would translate into approximately $6 billion today. He gave away an equivalent amount to his son John D. Rockefeller Jr., who in turn would gave away about 90 percent of that money. Now Rockefeller left himself with only, and I put 'only' in quotation marks here, he left himself with only about $25 million to play the stock market. Rockefeller, although he was such a shrewd operator and an almost infallible businessman at Standard Oil, was something less than perfect as a stock market investor, and in 1929 he was dragged down in the crash along with everyone else. He was reduced, poor man, to having only $7 million. In 1929 he was 90 years old, and he spent a lot of time during the next seven or eight years fighting his way back to $25 million. In fact, I discovered that he died just six weeks short of his 98th birthday, and just two or three days before he died, this little shriveled up old man was still playing the stock market, still desperately trying to get back to where he had been in September 1929.

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SCHINDLER: How would you characterize Gates’ philanthropy? Is he on pace to be one of the true titans of philanthropy or is he behind?
CHERNOW: Not yet. The most recent figures that I’ve seen show that Gates has given away $800 million, where his net worth is way in excess of $50 billion. This really is a very tiny percentage. Now the lesson of John D. Rockefeller’s life is that you have to work as hard at philanthropy as you do at business. And Rockefeller always felt that he was an enlightened philanthropist. And we have to remember he was as enlightened as philanthropist as he was ruthless as a businessman. He felt he was an outstanding philanthropist because he had started at the time that he was a teenager.

By the time that he was in his forties -- in other words, at the time when he was Bill Gates’ age -- he was already creating Spellman College in Atlanta, which was named after Rockefeller’s in-laws, and that was designed to educate freed female slaves and their daughters. By the time Rockefeller was in his fifties, he was creating the University of Chicago. By the time he was in his early sixties, he was creating the Rockefeller University, which was the first medical institute devoted exclusively to medical research. He was creating the general education board, that stimulated the formation of 800 high schools in the South.

"I think that if John D. Rockefeller were alive today, what he would recommend to Bill Gates is to start giving away the money as soon as possible in order to learn how to do it effectively."

I think that if John D. Rockefeller were alive today, what he would recommend to Bill Gates is to start giving away the money as soon as possible in order to learn how to do it effectively. I know that Gates has been quoted as saying that he is putting off the philanthropy precisely because he realizes that one has to devote a lot of time and effort to it, but I don’t think you can have an excess of $50 billion and sit on it quite that long without, frankly, becoming a big political issue.

You see, during the gilded age, the fortunes rolled up by people like John D. Rockefeller and Andrew Carnegie were being questioned. The very legitimacy of the system was at stake. And Rockefeller and Carnegie felt they had to show that they were recycling most of this money back into society for the system to be vindicated. It’s interesting that both Gates and his friend Buffet seem to be waiting to give the money away, which I think is a mistake, both from a personal and a political standpoint. I understand that Gates is actively running his business, this is a dynamic ever-changing expanding business, and he feels that it requires all of his time, but I think he should really begin to make time for the philanthropy.

SCHINDLER: There were two very specific parallels that just took my breath away. Microsoft at one time had agreements with many PC makers that required the PC companies to pay a royalty to Microsoft, not for every machine they shipped with Windows on it, but for every machine they shipped. Microsoft claimed this made accounting easier. Even if you shipped a machine with Unix or DR-DOS, you still paid Microsoft a royalty for that machine. There was a parallel, was there not, with a deal that Rockefeller had with the railroads?
CHERNOW: Let me preface my response by saying I am not an expert on the computer industry. I am very aware of the situation that you just described. If it is as you described it, there is a striking parallel. Rockefeller crafted a lot of secret deals with the railroads that not only gave him rebates, that is, discounts on every barrel of oil shipped by Standard Oil, but also gave him drawbacks. That is, he would receive a fee for every barrel of oil shipped by his competitors over the railroads. This would seem to be a historical parallel to the situation you're describing.

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SCHINDLER: I listened to Gates testify before the Senate Judiciary Committee this spring. He and Sen. Orrin Hatch of Utah engaged in a 15-minute soliloquy on a very simple question. Everyone in the audience, every knowledgeable person in the audience, knew what Hatch wanted to know. Most of us knew the answer. Gates declined to answer the question as intended, and answered only the question as asked. I was struck by your description of testimony by John Rockefeller, particularly in a court case where he took advantage of a misstatement by one of the attorneys. Can you describe that for us?
CHERNOW: Actually, Rockefeller's earliest and most notorious collusion with the railroads was the creation of the South Improvement Company in 1872. The idea was Standard Oil would form this cabal with the railroads and give such preferential rates to Standard Oil and such punitive rates to rivals that it would effectively make it impossible for anybody to compete with Rockefeller. When this conspiracy was exposed, it fell apart. It was a stillborn conspiracy. As Rockefeller liked to say, it never collected a dime.

But the plot had been hatched. Years later, during a famous antitrust suit, Rockefeller was asked by the prosecuting attorney whether he had ever been a member of the Southern Improvement Company. Rockefeller, who was a very foxy gentleman with an elephantine memory, said, "No, I was never a member of the Southern Improvement Company." The attorney had misspoken and Rockefeller profited from that. He was a very cunning witness. As I describe in the book, he had a capacity for turning himself into this sweet, bumbling old man. He did a very good imitation of an Alzheimer's patient on the witness stand.

During one antitrust case, the opening question, addressed to him, was "What is the business of the Standard Oil Company?" Rockefeller had difficulty answering the question. Finally, after a couple of minutes, he said, "I think it operates a refinery in New Jersey."

Prosecutors would throw their hands up in frustration because he would seem to be this amiable, but forgetful old man. Of course, he knew exactly what he was doing. He had a great deal of experience being an evasive witness. A lot of lawyers said he was the toughest witness they had ever cross-examined.

SCHINDLER: Rockefeller was the toughest witness of the beginning of the century, I'll bet Gates, if he ever testifies, will be the toughest witness of the end of the 20th century.
CHERNOW: I think one difference is the power of public opinion ... Rockefeller, for many years, was able to get away with these shenanigans in the courtroom. I think it would be much more difficult for a CEO to do it today. Things are more widely reported. The public is less patient with that type of behavior.

Remember, in Rockefeller's day it was still very much a 'public be damned' attitude. Everyone remembers John D. Rockefeller as an old man handing out dimes. They picture him as almost this ham actor in old age. When he was a younger man, Bill Gates' age, he almost never gave interviews. He never allowed himself to be photographed. So we have photographs of Rockefeller in his younger years in private family situations. There's not a single authenticated photo of John D. Rockefeller in a business situation. That is, there is no authenticated picture that shows him in an oil field, or an oil refinery, or even in his office at 26 Broadway in lower Manhattan. This is the man who created the world oil industry, and there is not a single oil-related picture of him, which is extraordinary.

Of course we have a million pictures of Bill Gates with computers and all manner of high-tech gadgetry. We live in a much more consumer age, an age of mass media. There is an expectation that people will be more forthcoming when challenged.